ARM Soars 5% as ASIC Ambitions Ignite Analyst Optimism – What’s Next?

• ARM shares surge 5.11% to $154.63, hitting an intraday high of $154.75
• BNP Paribas upgrades rating to Outperform, targets $210 citing ASIC upside
• Dynamic PE skyrockets to 207x as investors price in AI infrastructure dominance

Today’s rally positions ARM as a critical player in the $500B Stargate Project, with its ASIC strategy capturing Wall Street’s imagination. The stock’s meteoric rise reflects a bet on its shift from licensing to custom silicon, even as valuation concerns linger.

BNP’s ASIC Bull Case Ignites a 5% Surge
The catalyst? BNP Paribas’ upgrade to Outperform, which highlighted ARM’s pivot to ASICs—custom chips for AI workloads. Analyst David O’Connor argued capturing just 7% of the addressable market could double operating profit, with the stock’s implied 40% upside to $210 underscoring underappreciated potential. The analyst’s bullishness resonates with the Stargate Project’s push for energy-efficient architectures, where ARM’s Neoverse platform and licensing model give it a structural edge over Intel and NVIDIA.

Target $160+ with These Calls – Watch Bollinger Bands for Breakouts
Risk Metrics:
• RSI: 37.36 (Undersold, below 50)
• Bollinger Bands: Trading near Upper Band ($164.12)
• MACD: Negative Histogram (-2.02) suggests short-term bearishness

With ARM’s 30-day resistance at $164 and support at $138, aggressive buyers can fade near-term volatility. The ARM20250725C147 call (strike $147) and ARM20250725C145 call (strike $145) stand out:

1. ARM20250725C147 (Call, $147 Strike):
- IV: 52.89% | Leverage: 86% | Delta: 0.73 | Theta: -0.69 | Gamma: 0.024
- Why Buy? A 5% upside to $162.36 would yield $15.36 intrinsic value, with gamma amplifying gains if momentum holds. The steep theta means time decay is manageable for a 2-week hold.

2. ARM20250725C145 (Call, $145 Strike):
- IV: 48.05% | Leverage: 59% | Delta: 0.80 | Theta: -0.03 | Gamma: 0.023
- Why Buy? A safer entry with 6% downside buffer. A $162.36 close would generate $17.36 profit, leveraging ARM’s licensing tailwinds.

Action Hook: Bullish investors should layer into $145/$147 calls now. Short the ARM20250725P140 put (strike $140) if dips test $145 support—its -56% price drop reflects weak downside conviction.

Backtest Arm Holdings Stock Performance
The backtest of ARM's performance after a 5% intraday increase shows mixed results. While the 3-day win rate is high at 52.56%, the returns over the 3, 10, and 30 days are relatively modest, with a maximum return of only 0.86% over 30 days. This suggests that while ARM tends to bounce back quickly from intraday dips, its longer-term performance after such surges is generally muted.

ARM’s ASIC Bet: Ride the Wave or Wait for Wider Valuation Gaps?
ARM’s 5% surge underscores its role in the Stargate-driven AI infrastructure boom, but its 207x PE demands flawless execution. Investors must monitor Intel’s -1.6% stumble (INTC at $145.43) for sector dynamics. Key levels: $164 (Bollinger upper band) offers resistance, while $138-$140 (30-day support) tests valuation sanity. Aggressive bulls should target the $147/$145 calls for a $160+ breakout, but fear of a correction below $150 could trigger profit-taking. Final Call: Deploy 50% of capital now, scale into dips below $152—this is a multi-quarter bet on ASIC dominance.